Mercantilism is Like Cockroaches: Grotesque Yet Indestructible as a Species

Distressed by U.S. trade with China, Raymond Richman and Howard Richman write that “Although exports to China did increase both American GDP and American income, imports from China subtracted even more from both GDP and income” (“Obama Picks a Progressive Lawyer for Top Economist,” Feb. 3).

This fact is true only in the most technical of manners, given that GDP is defined such that any excess of imports over exports reduces its measured value. But Messrs. Richman and Richman are misled by this accounting artifact into arguing that imports from China reduce our prosperity while exports increase our prosperity.

What is the point of exporting if not ultimately to import – and to import as much as possible for any given amount of exports? According to the mercantilist (that is to say, twisted) logic employed by the two Mr. Richmans, American prosperity would be maximally promoted if, in exchange for American goods and services exported to China, the Chinese shipped to our shores only bags stuffed with Monopoly money.